UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended:
or
For the transition period from _______________ to _______________
Commission File Number:
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
| (Zip Code) |
(
(Registrant’s telephone number, including area code)
NONE
(Former name former address and former fiscal year if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
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| The | ||
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| The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
|
| Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
At August 15, 2025, there were
CAUTIONARY STATEMENT REGARDING RISKS
AND UNCERTAINTIES THAT MAY AFFECT FUTURE RESULTS
Forward-Looking Information
This quarterly report contains forward-looking statements about the business, financial condition and prospects of BT Brands, Inc. and its wholly-owned subsidiaries (together, the “Company”). Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of forward-looking terminology such as “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” “would,” “anticipates,” “potential,” “confident,” “optimistic” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations, and future plans. Forward-looking statements can also be identified by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties.
While the Company believes the expectations reflected in forward-looking statements are reasonable, there can be no assurances that such expectations will prove to be accurate. Security holders are cautioned that such forward-looking statements involve risks and uncertainties. You should evaluate all forward-looking statements made in this report in the context of the factors that could cause outcomes to differ materially from our expectations. These factors include, but are not limited to:
| · | capital requirements and the availability of capital to fund our growth; |
| · | difficulties executing our growth strategy, including completing profitable acquisitions; |
| · | all risks related to acquisition of an existing business, including identifying a suitable target, completing comprehensive due diligence, the impact on our financial condition of any debt we may incur in acquiring the target, the ability to integrate the target’s operations with our existing operations, our ability to retain management and key employees of the target, among other factors relevant to acquisitions; |
| · | challenges related to hiring and retaining employees at competitive wage rates; |
| · | shortages or interruptions of supplies; |
| · | negative publicity; |
| · | competition from other businesses with significantly greater resources than we have; |
| · | changes in economic conditions, including the effects on consumer confidence and discretionary spending; |
| · | our inability to manage our growth; |
| · | loss of key personnel; |
| · | labor shortages and increased labor costs; |
| · | the impact of governmental laws and regulations; |
| · | failure to obtain and maintain required licenses and permits to comply with regulations; |
| · | adverse weather, and other unforeseen conditions: |
| · | inadequately protecting intellectual property; |
| · | breaches of security of confidential consumer information; and |
| · | other factors discussed in the Company’s Annual Report on Form 10-K under “Business” and “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” |
| 2 |
We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, will result in the consequences we anticipate or affect us or our operations in the ways we expect. The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law. If we update one or more forward-looking statements, no inference should be made that we will make additional updates regarding those or other forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.
From time to time, oral or written forward-looking statements are also included in our reports on Forms 10-K, 10-Q, and 8-K, our Schedule 14A, our press releases and other materials released to the public. Although we believe that at the time made, the expectations reflected in all of these forward-looking statements are and will be reasonable, any or all of the forward-looking statements may prove to be incorrect. This may occur as a result of inaccurate assumptions or as a consequence of known or unknown risks and uncertainties. Many factors discussed in this Quarterly Report on Form 10-Q, certain of which are beyond our control, will be important in determining our future performance. Consequently, actual results may differ materially from those anticipated from forward-looking statements. In light of these and other uncertainties, you should not regard the inclusion of a forward-looking statement in this Quarterly Report on Form 10-Q or other public communications that we might make as a representation that our plans and objectives will be achieved, and you should not place undue reliance on such forward-looking statements.
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made on related subjects in our subsequent periodic reports filed with the Securities and Exchange Commission.
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TABLE OF CONTENTS
| 5 | |||
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
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UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
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| 4 |
| Table of Contents |
PART I FINANCIAL INFORMATION
BT BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
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| (Unaudited) |
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| June 29, 2025 |
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| December 29, 2024 |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
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Marketable securities |
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Receivables |
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Demand notes receivable from related company |
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Inventory |
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Prepaid expenses and other current assets |
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Assets held for sale |
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Total current assets |
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PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET |
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OPERATING LEASES RIGHT-OF-USE ASSETS |
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EQUITY INVESTMENT IN UNCONSOLIDATED SUBSIDIARY |
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EQUITY INVESTMENT IN RELATED COMPANY |
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GOODWILL |
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INTANGIBLE ASSETS, NET |
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OTHER ASSETS, NET |
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Total assets |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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CURRENT LIABILITIES |
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Accounts payable |
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Current maturities of long-term debt |
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Current operating lease obligations |
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Accrued expenses |
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Total current liabilities |
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LONG-TERM DEBT, LESS CURRENT PORTION |
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NONCURRENT OPERATING LEASE OBLIGATIONS |
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Total liabilities |
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COMMITMENTS AND CONTINGENCIES |
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SHAREHOLDERS' EQUITY |
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Preferred stock, $ |
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Common stock, $ |
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Less cost of |
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Additional paid-in capital |
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Accumulated deficit |
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Total shareholders' equity |
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Total liabilities and shareholders' equity |
| $ |
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| $ |
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See Notes to Condensed Consolidated Financial Statements
| 5 |
| Table of Contents |
BT BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
| 26 Weeks Ended |
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| 26 Weeks Ended, |
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| 13 Weeks Ended |
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| 13 Weeks Ended |
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| June 29, 2025 |
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| June 30, 2024 |
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| June 29, 2025 |
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| June 30, 2024 |
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SALES |
| $ |
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| $ |
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| $ |
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| $ |
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COSTS AND EXPENSES |
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Restaurant operating expenses |
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Food and paper costs |
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Labor costs |
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Occupancy costs |
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Other operating expenses |
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Depreciation and amortization expenses |
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General and administrative expenses |
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Total costs and expenses |
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Loss from operations |
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UNREALIZED GAIN ON MARKETABLE SECURITIES |
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REALIZED INVESTMENT GAIN |
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INTEREST AND DIVIDEND INCOME |
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INTEREST EXPENSE |
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| ( | ) |
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| ( | ) |
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| ( | ) |
OTHER INCOME |
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EQUITY IN NET LOSS OF AFFILIATE |
|
| ( | ) |
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| ( | ) |
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| ( | ) |
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| ( | ) |
INCOME (LOSS) BEFORE TAXES |
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| ( | ) |
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| ( | ) |
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| ( | ) | |
INCOME TAX BENEFIT |
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NET INCOME (LOSS) |
| $ | ( | ) |
| $ | ( | ) |
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| $ | ( | ) | |
NET INCOME (LOSS) PER COMMON SHARE - Basic and Diluted |
| $ | ( | ) |
| $ | ( | ) |
| $ |
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| $ | ( | ) | |
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WEIGHTED AVERAGE SHARES USED IN COMPUTING PER COMMON SHARE AMOUNTS - Basic and Diluted |
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See Notes to Condensed Consolidated Financial Statements
| 6 |
| Table of Contents |
BT BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
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| Common |
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| Additional |
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For the 26-week periods- |
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| Stock |
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| Paid-in |
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| Accumulated |
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| Shares |
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| Amount |
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| Capital |
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| (Deficit) |
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| Treasury |
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| Total |
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Balances, December 29, 2024 |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ |
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Stock-based compensation |
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| - |
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Net loss |
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| - |
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| ( | ) |
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Balances, June 29, 2025 |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ |
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Balances, December 31, 2023 |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ |
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Stock-based compensation |
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| - |
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Treasury stock purchase |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| ( | ) | ||
Net loss |
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| - |
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| ( | ) |
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| ( | ) | |||
Balances, June 30, 2024 |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ |
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| Common |
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| Additional |
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For the 13-week periods- |
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| Stock |
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| Paid-in |
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| Accumulated |
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| Shares |
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| Amount |
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| Capital |
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| (Deficit) |
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| Treasury |
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| Total |
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Balances, March 30, 2025 |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ |
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Stock-based compensation |
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| - |
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Net income |
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| - |
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Balances, June 29, 2025 |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ |
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Balances, March 31, 2024 |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ |
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Stock-based compensation |
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| - |
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Treasury stock purchase |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| ( | ) | ||
Net loss |
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| - |
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| ( | ) |
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| ( | ) | |||
Balances, June 30, 2024 |
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| $ |
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| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
See Notes to Condensed Consolidated Financial Statements
| 7 |
| Table of Contents |
BT BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
| 26 Weeks ended, |
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|
| June 29, 2025 |
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| June 30, 2024 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash provide by (used in) operating activities- |
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Depreciation and amortization |
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Amortization of debt issuance costs included in interest expense |
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Deferred taxes |
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| ( | ) | |
Stock-based compensation |
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Unrealized gain on marketable securities |
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Gain on marketable securities |
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Loss on equity method investment |
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Non-cash operating lease expense |
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Changes in operating assets and liabilities, net of acquisitions - |
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Receivables |
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Inventory |
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| ( | ) | |
Prepaid expenses and other current assets |
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| ( | ) | |
Accounts payable |
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| ( | ) |
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Accrued expenses |
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| ( | ) | |
Net cash provided by (used) in operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Acquisition of net assets of Schnitzel Haus |
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| ( | ) | |
Proceeds from the sale of equipment |
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Purchase of property and equipment |
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| ( | ) |
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| ( | ) |
Demand notes receivable from related company |
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| ( | ) |
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| ( | ) |
Purchase of marketable securities |
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| ( | ) |
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| ( | ) |
Proceeds from the sale of marketable securities |
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Purchase of water bottle inventory |
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Other assets |
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| ( | ) | |
Net cash used in investing activities |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Payment on margin loan to finance purchase of marketable securities |
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| ( | ) | |
Principal payment on long-term debt |
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| ( | ) |
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| ( | ) |
Purchase of treasury stock |
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| ( | ) | |
Net cash used in financing activities |
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| ( | ) |
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CHANGE IN CASH AND CASH EQUIVALENTS |
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| ( | ) |
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| ( | ) |
CASH and CASH EQUIVALENTS, BEGINNING OF PERIOD |
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CASH AND CASH EQUIVALENTS, END OF PERIOD |
| $ |
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| $ |
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SUPPLEMENTAL DISCLOSURES |
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Cash paid for interest |
| $ |
|
| $ |
| ||
See Notes to Condensed Consolidated Financial Statements
| 8 |
| Table of Contents |
BT BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of BT Brands, Inc. and its subsidiaries (the “Company,” “we,” “our,” “us,” “BT Brands,” or “BT”) and have been prepared in accordance with the US generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) requirements for Form 10-Q and Article 10 of Regulation S-X. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared on a basis consistent in all material respects with the accounting policies for the fiscal year ending December 29, 2024. In our opinion, all regular and recurring adjustments necessary for a fair presentation of our financial position and results of operation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.
The accompanying Condensed Consolidated Balance Sheet as of June 29, 2025, does not include all the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of December 29, 2024, and the related notes included in our Form 10-K for the fiscal year ending December 29, 2024.
Reclassifications
Certain reclassifications have been made to prior year amounts to conform to current period presentations. These changes have had no impact on the Company’s total assets, liabilities, stockholders’ equity or net loss.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and the differences could be material.
The Company
BT Brands was incorporated as Hartmax of NY Inc. on January 19, 2016. Effective July 30, 2018, the Company acquired 100% of BTND, LLC.
We operate restaurants in the eastern two-thirds of the United States. Including our
| · | Six Burger Time fast-food restaurants located in the North Central region of the United States, collectively (“BTND”), a Burger Time location in Minot, North Dakota, was permanently closed in July 2025; |
| · | Bagger Dave’s Burger Tavern, Inc., a |
| · | Keegan’s Seafood Grille in Indian Rocks Beach, Florida (“Keegan’s”); |
| · | Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts (“PIE”); |
| · | Schnitzel Haus is a German-themed fine dining restaurant and bar in Hobe Sound, Florida“(Schnitzel)”. |
See Note 9 for information regarding our related party transactions, including our investment in and loans to NGI Corporation.
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Business
Our restaurants cover a broad range of concepts. We own and operate Keegan’s Seafood Grille (“Keegan’s”), a dine-in restaurant located in Florida; Pie In The Sky Coffee and Bakery (“PIE”), a casual dining coffee shop bakery in Woods Hole, Massachusetts: and, Schnitzel Haus (“Schnitzel”), a German-themed restaurant in Hobe Sound, Florida, purchased in May, 2024. Our Burger Time restaurants offer a variety of burgers and other affordable foods, sides, and soft drinks. Keegan’s has operated in Indian Rocks Beach, Florida, for over thirty-five years, offering a variety of traditional fresh seafood items for lunch and dinner. The menu at Keegan’s includes beer and wine. PIE features an array of freshly prepared baked goods, sandwiches, and our locally roasted coffee. Schnitzel is a full-service restaurant and bar featuring a German-themed menu and specialty imported European beers. Our revenues are derived from food and beverages at our restaurants, retail goods such as apparel, private-labeled “Keegan’s Hot Sauce,” and other souvenir items. “Souvenir” items account for an insignificant portion of our income.
On June 2, 2022, BT Brands purchased
As detailed in Note 9 regarding Related Party transactions for the quarter, the Company agreed with NGI Corporation (“NGI”) to purchase and process bottled water featuring characters licensed from The Walt Disney Company. The Company’s inventory at June 29, 2025, includes $
Fiscal Year Periods
BT Brand’s fiscal year is 52/53 weeks, ending on the Sunday closest to December 31. Most years consist of four 13-week accounting periods comprising a 52-week year. Fiscal 2024 was 52 weeks ending December 29, 2024, and Fiscal 2025 is 52 weeks ending December 28, 2025. References in this report to periods refer to the 13 and 26-week fiscal periods.
Cash and Cash Equivalents
Cash and cash equivalents may include money market mutual funds and United States Treasury Bills with original maturities at the time of purchase of three months or less. Our bank deposits often exceed the amount insured by the Federal Deposit Insurance Corporation. In addition, we maintain cash deposits in brokerage accounts, including money market funds above the insured amount. We do not believe there is a significant risk related to cash.
Investments
Our equity investment in an unconsolidated subsidiary of $
Investment in equity and notes receivable from a related company is $
Bagger Dave’s common stock is traded on the OTC Pink Sheets market and files quarterly and annual financial reports with OTCMarkets, Inc. under the Alternative Reporting Standard. The listing with OTC Markets does not require financial information to be audited. For the 26 weeks ending June 29, 2025, Bagger Dave’s had sales of $
The Company classifies its investments in debt securities, such as convertible notes receivable, as available-for-sale when they are not classified as either held-to-maturity or trading securities. These securities are carried at fair value, with unrealized gains and losses, net of deferred taxes, reported as a component of accumulated other comprehensive income in stockholders' equity. The fair value of available-for-sale debt securities is determined using quoted market prices when available. In the absence of quoted market prices, fair value is determined using observable inputs such as interest rates and yield curves. Realized gains and losses on the sale of available-for-sale debt securities are determined using the specific identification method and are recognized in earnings. Interest income on available-for-sale debt securities is recognized when earned and is included in interest income on the Consolidated Statements of Operations. The Company evaluates available-for-sale debt securities for impairment in accordance with ASC 326-30 to determine whether an allowance for credit losses is needed. The Company considers various factors in assessing potential credit losses, such as the severity and duration of the impairment, the issuer's financial condition, and whether it has the intent to sell the security or it is more likely than not that it will be required to sell the security before its anticipated recovery.
Fair Value of Financial Instruments
Our accounting for fair value measurements of assets and liabilities is that they are recognized or disclosed at fair value in the statements on a recurring or nonrecurring basis, and adhere to the Financial Accounting Standards Board (FASB) fair value hierarchy that prioritizes the input to valuation techniques used to measure fair value.
The hierarchy prioritizes unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements).
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The three levels of the fair value hierarchy are as follows:
| · | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we can access at the measurement date. |
| · | Level 2 inputs are inputs other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the entire term of the asset or liability. |
| · | Level 3 inputs are unobservable inputs for the asset or liability. |
The carrying values of cash equivalents, receivables, accounts payable, and other financial working capital items approximate fair value due to their short maturity. The following is a summary of the fair value of investments.
|
| June 29, 2025 |
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| December 29, 2024 |
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| Fair value Carrying Amount |
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| Level 1 |
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| Level 3 |
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| Fair value Carrying Amount |
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| Level 1 |
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| Level 3 |
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Common stocks |
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Real Estate Investment Trust |
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Convertible demand note receivable from related party (Note 9) |
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Total |
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Receivables
Receivables consist of estimated rebates due from primary vendors.
Inventory
Inventory consists of food, beverages, and supplies. It is stated at the lower cost or market (first-in, first-out method) or net realizable value. Inventory includes $292,372 of Disney-licensed water in refillable cans related to the Company’s investment in NGI, see Note 9 to Consolidated Condensed Financial Statements.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over their estimated useful lives, which range from three to thirty years.
We review long-lived assets to determine if the carrying value of these assets is recoverable based on estimated cash flows. Assets are evaluated at the lowest level, for which cash flows can be identified at the restaurant level. In determining future cash flows, we estimate the future operating results of each restaurant. If such assets are considered impaired, the impairment is the amount by which the assets’ carrying value exceeds the assets’ fair value.
Goodwill and Intangible Assets and Other Assets
Goodwill is not amortized and is tested for impairment at least annually. The cost of other intangible assets is amortized over their expected useful lives.
Assets Held for Sale
The Company closed its Ham Lake, Minnesota, location in February 2025. A Burger Time location in Richmond, Indiana, closed on 2018, and on June 29, 2025, was under contract for sale. The sale of Richmond assets was completed on August 13, 2025. The Ham Lake and Richmond properties meet the held for sale criteria and are reflected in the accompanying financial statements as offered for sale.
Income Taxes
The Company follows Accounting Standards Codification (ASC 740), Accounting for Income Taxes. ASC 740 using the asset and liability approach in accounting for income taxes. Deferred tax assets and liability balances are determined based on differences between financial reporting and tax bases of assets and liabilities. They are measured using the enacted tax rates and laws that will be in effect when the differences are expected to be reversed. If necessary, we provide a valuation allowance to reduce deferred tax assets to their estimated realizable value. The deferred tax assets are reviewed periodically for recoverability, and valuation allowances are adjusted as required.
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As of June 29, 2025, we used a net combined federal and state rate of approximately
The Company has no accrued interest or penalties relating to income tax obligations. There are currently no federal or state examinations in progress. The Company has not had any federal or state tax examinations since its inception. All periods since inception remain open for inspection.
Per Common Share Amounts
Net income per common share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding during the period. Diluted net income or loss per share is calculated by dividing net income by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. Common stock equivalents are excluded from the computation of diluted per-share amounts if their effect is anti-dilutive. There were no dilutive shares for the periods ending in 2025 and 2024.
NOTE 2 – INTANGIBLE ASSETS
At June 29, 2025, and December 29, 2024, the value of acquired Intangible Assets being amortized are the following:
June 29, 2025- |
| Estimated Life (Years) |
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| Original Cost |
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| Accumulated Amortization |
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| Net Carrying Value |
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Covenants not to Compete |
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Tradenames |
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December 29, 2024- |
| Estimated Life (Years) |
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| Original Cost |
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| Accumulated Amortization |
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Covenants not to Compete |
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Tradenames |
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On January 2, 2025, the Company closed its Village Bier Garten location. In connection with the closure, the Company recognized the impairment of Village Bier Garten assets in 2024.
The total amortization of intangible assets, including the covenants not to compete, will approximate $
The total amortization expense was $
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NOTE 3 – PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
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| December 29, 2024 |
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Land |
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Equipment |
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Buildings and leasehold improvements |
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Total property and equipment |
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Accumulated depreciation |
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Net |
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Less – property held for sale |
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Less – impairment charge |
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Net property and equipment |
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Depreciation expense for the 26-week periods in 2025 and 2024 was $
NOTE 4 - ACCRUED EXPENSES
Accrued expenses consisted of the following at:
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| June 29, 2025 |
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| December 29, 2024 |
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NOTE 5 - LONG-TERM DEBT
Our long-term debt is as follows:
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| June 29, 2025 |
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| December 29, 2024 |
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Three notes payable to a bank dated June 28, 2021, due in monthly installments totaling $22,213, including principal and interest at a fixed rate of 3.45% through June 28, 2031. Beginning in July 2031, the interest rate will equal the greater of the “prime rate” plus .75%, or 3.45%. These notes mature on June 28, 2036. The notes are secured by mortgages covering seven owned properties, BT Brands and an officer of the Company, both of whom guarantee payment of the notes. |
| $ |
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Less - unamortized debt issuance costs |
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Current maturities |
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NOTE 6 - STOCK-BASED COMPENSATION
In 2019, we adopted the BT Brands, Inc. 2019 Incentive Plan (the “Plan”), under which the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units, and other stock and cash awards to eligible participants. As of June 29, 2025,
In 2024, we issued a total of
In 2023, we granted a
Compensation expense equal to the fair value of the options at the grant date is recognized in general and administrative expense over the applicable service period. Total equity-based compensation expenses for stock options and warrants for the 26-week periods in 2025 and 2024 were $
Subject to the discretion of the Compensation Committee of the board of directors at the time of grant, generally, stock options granted to employees and directors vest 20% upon grant and 20% in annual installments for four years. Unless modified by the board of directors, options expire ten years from the date of the grant and terminate 90 days following termination of employment.
During July 2025,
We utilize the Black-Scholes option pricing model when determining the compensation cost associated with stock options issued using the following significant assumptions:
| · | Stock price – Published trading market values of the Company’s common stock as of the grant date. |
| · | Exercise price – The stated exercise price of the stock option. |
| · | Expected life – The simplified method |
| · | Expected dividend – The rate of dividends expected to be paid over the term of the stock option. |
| · | Volatility – Estimated volatility. |
| · | Risk-free interest rate – The daily United States Treasury yield curve rate corresponding to the expected life of the award |
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Information regarding our stock options is summarized below:
26-Week period ended June 29, 2025- |
| Number of Options |
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| Weighted Average Exercise Price |
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26-Week period ended June 30, 2024- |
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Options exercisable at June 30, 2024 |
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On February 27, 2023, the Company finalized a Contingent Incentive Share Award with senior executives. The Contingent Incentive Share Awards provides that so long as the Company’s publicly traded warrants are outstanding, senior management of the Company will be deemed to earn an aggregate award of
NOTE 7 – LEASES
The present value of leases is calculated when the lease is entered into or assumed by us using an incremental borrowing rate at the time. Variable lease expenses are primarily property taxes and insurance. The remaining lease covering the former Village Bier Garten location was assigned to an unrelated party in January 2025.
Keegan’s lease is for approximately
The PIE lease is for approximately
In May 2024, with the acquisition of Schnitzel Haus assets, we assumed the remaining
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The following is a schedule of the approximate minimum future lease payments on the operating leases as of June 29, 2025:
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Remainder 2025 |
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2026 |
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Less - interest |
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The total operating lease expenses for the second 13-week period in 2025 and 2024 were approximately $
The Company pays monthly rent under month-to-month arrangements for corporate and administrative office spaces in Minnetonka, Minnesota, of approximately $
NOTE 8 – SHAREHOLDERS’ EQUITY
On November 12, 2021, the Company completed a public offering of Units consisting of one share of common stock and one
On June 6, 2024, we authorized a stock repurchase program, under which we may repurchase up to
Potential Sale and Issuance of Stock
On December 13, 2024, BT Brands entered into an Equity Distribution Agreement (the “Distribution Agreement “) with Maxim Group LLC (“Maxim”) to sell shares of the Company’s common stock, subject to the maximum aggregate sales proceeds of up to $
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NOTE 9 - RELATED PARTY TRANSACTION
NGI Corporation
As of June 29, 2025, the total amount invested in equity and loans to NGI is $
| · | $ |
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| As consideration for the demand loans, the |
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BT Brands has purchased Disney-character aluminum bottles through direct payment to vendors and suppliers, aggregating approximately
Prior to 2023, BT Brands made a series of equity investments in NGI and received
As of June 29, 2025, our total investment in NGI is as follows:
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Balance, December 31, 2023 |
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2024 Activity |
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Balance, December 29, 2024 |
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26 weeks ended June 29, 2025 |
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Balance, June 29, 2025 |
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As of June 29, 2025, assuming exercise of all warrants and options, BT Brands owns less than 5 % of NGI's fully diluted shares.
Our COO, Kenneth Brimmer, is a member of NGI’s board and its CFO. Effective April 1, 2025, Gary Copperud resigned from the NGI board of directors.
NOTE 10 – CONTINGENCIES
In the course of its business, the Company may be a party to claims and legal or regulatory actions arising from the conduct of its business. We are unaware of any significant asserted or potential claims that could materially impact our financial position.
NOTE 11 – SUBSEQUENT EVENT – RICHMOND SALE
On August 13, 2025, the Company completed the sale of its Richmond property, which had been held for sale, for a gross selling price of $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of the financial condition, results of operations, liquidity, and capital resources of BT Brands, Inc. and its wholly-owned subsidiaries (together, “BT Brands” “we,” “our,” or the “Company”) should be read in conjunction with the Company’s condensed consolidated financial statements and accompanying notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as with the audited consolidated financial statements and accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the year ended December 29, 2024.
Introduction
As of June 29, 2025, including our partially owned Bagger Dave’s business, we own and operate the following sixteen restaurants:
| · | Seven Burger Time fast-food restaurants (“BTND”); |
| · | Keegan’s Seafood Grille in Indian Rocks Beach, Florida (“Keegan’s”); |
| · | Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts (“PIE”). |
| · | Schnitzel Haus in Stuart, Florida (“Schnitzel”). |
| · | Unconsolidated affiliate, Bagger Dave’s Burger Tavern, Inc., 40.7% owned, operates six Bagger Dave’s restaurants in Michigan, Ohio, and Indiana (“BD”). |
Burger Time opened its first restaurant in Fargo, North Dakota, in 1987. Burger Time restaurants feature grilled hamburgers and other affordable foods such as chicken sandwiches, pulled pork sandwiches, sides, and soft drinks. Burger Time’s operating principles include (i) offering bigger burgers and more value for the money; (ii) offering a limited menu to permit attention to quality and speed of preparation; (iii) providing fast service by way of single and double drive-thru designs and a point-of-sale system that expedites the ordering and preparation process, and (iv) great tasting and quality food made fresh to order at a fair price. Our primary strategy is to serve the drive-thru and take-out segment of the quick-service restaurant industry.
The average customer transaction at our Burger Time restaurants was unchanged in the first half of 2025 at approximately $15.00. We have implemented new initiatives for Burger Time in third-party delivery, which generally results in a higher check average, and we expect to contribute to future sales growth. Many factors influence our sales trends. Our business environment is challenging, as competition is intense.
We operate through a central management organization that provides continuity across our restaurant base by utilizing the efficiencies of a central management team.
Notable Recent Events
At the beginning of 2025, we closed our Village Bier Garden restaurant in Cocoa, Florida, and in February 2025, we ceased operations at our Ham Lake, Minnesota location. For the 26-week period in 2024, the two closed locations contributed approximately $935,000 in revenue and recorded an operating loss of approximately $213,000. We entered into an assignment of the Village Bier Garten lease to an unrelated party and are currently assessing alternatives for the Ham Lake location, including the sale of the property, which we believe would result in a gain on the sale of assets.
Material Trends and Uncertainties
Industry trends have a direct impact on our business. Current trends include difficulties attracting food service workers and rapid inflation in the cost of input items. Recent trends also include the rapidly changing area of technology and food delivery. The major companies in the restaurant industry have rapidly adopted and developed smartphone and mobile delivery applications, aggressively expanded drive-through operations, and developed loyalty programs and database marketing supported by a robust technology platform. We expect these trends to continue as restaurants aggressively compete for customers. Competitors will continue to discount prices through aggressive promotions.
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Recent performance
The following are key highlights from the Company's performance for the 13-week and 26-week periods ending June 29, 2025:
| · | Net sales for the 13 weeks were $3.78 million, down 8.1% from 2024 due to two store closures; Schnitzel Haus contributed $0.5 million. |
| · | Net income for the 13 weeks improved to $55,031 from a loss of $69,952 in 2024. |
| · | Restaurant-level EBITDA for the quarter improved to 16.9% of revenues from negative 10.6% in 2024. |
| · | Labor costs fell to 37.0% of sales from 40.2% in 2024, reflecting improved staffing efficiency and store closures. |
| · | Total costs and expenses decreased significantly due to disciplined cost control, offsetting a decline in sales. |
| · | For the 26 weeks, net loss improved to $274,818 from $515,652 in 2024, driven by operational efficiencies and the closing of two underperforming locations. |
| · | Strong focus on cost control, improved pricing strategies, and the impact of strategic closures contributed to improved margins. |
| · | The Company plans to continue leveraging seasonal strength, cost reductions, and targeted sales initiatives for future growth. |
Results of Operations for the Thirteen Weeks Ended June 29, 2025, and the Thirteen Weeks Ended June 30, 2024
Summary
The Company’s focus on operational efficiencies, disciplined expense management, and strategic closures of underperforming locations has resulted in improved margins and improved results despite lower sales volumes. Continued cost management and leveraging seasonal strengths are expected to be a central focus of management in future quarters. For the thirteen weeks ending June 29, 2025, net sales were $3.78 million, a decrease of $330,949 or 8.1% compared to $4.11 million for the same period in 2024. The decline reflects the closing of the Village Bier Garten and the Ham Lake Burger Time location in the first quarter of 2025. Total costs and expenses decreased to $3.85 million from $4.30 million in the prior year. The loss from operations narrowed significantly to $75,121, compared to a loss of $188,543 in 2024. After including investment gains, interest, and equity losses, the Company recorded net income of $55,031, a significant improvement compared to a net loss of $69,952 in the same period of 2024.
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| Table of Contents |
The following table sets forth our Condensed Statements of Operations and percentages of total sales for the thirteen-week fiscal periods. The percentages below may not reconcile because of rounding.
|
| 13 weeks ended, June 29, 2025 |
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| 13 weeks ended, June 30, 2024 |
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| Amount |
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| Amount |
|
| % |
| ||||
SALES |
| $ | 3,779,690 |
|
|
| 100.0 | % |
| $ | 4,110,639 |
|
|
| 100.0 | % |
COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and paper costs |
|
| 1,249,220 |
|
|
| 33.1 |
|
|
| 1,565,070 |
|
|
| 38.1 |
|
Labor costs |
|
| 1,374,603 |
|
|
| 36.4 |
|
|
| 1,551,762 |
|
|
| 37.7 |
|
Occupancy costs |
|
| 302,021 |
|
|
| 8.0 |
|
|
| 344,356 |
|
|
| 8.4 |
|
Other operating expenses |
|
| 253,185 |
|
|
| 6.7 |
|
|
| 211,838 |
|
|
| 5.2 |
|
Depreciation and amortization |
|
| 144,725 |
|
|
| 3.8 |
|
|
| 171,351 |
|
|
| 4.2 |
|
General and administrative |
|
| 531,057 |
|
|
| 14.1 |
|
|
| 454,805 |
|
|
| 11.1 |
|
Total costs and expenses |
|
| 3,854,811 |
|
|
| 102.0 |
|
|
| 4,299,182 |
|
|
| 104.6 |
|
Loss from operations |
|
| (75,121 | ) |
|
| (2.0 | ) |
|
| (188,543 | ) |
|
| (4.6 | ) |
UNREALIZED GAIN ON MARKETABLE SECURITIES |
|
| 82,128 |
|
|
| 2.2 |
|
|
| 118,184 |
|
|
| 2.9 |
|
REALIZED INVESTMENT GAIN |
|
| 79,026 |
|
|
| 2.1 |
|
|
| 29,562 |
|
|
| .7 |
|
INTEREST EXPENSE |
|
| (19,550 | ) |
|
| (.5 | ) |
|
| (22,551 | ) |
|
| (0.5 | ) |
INTEREST AND DIVIDEND INCOME |
|
| 40,367 |
|
|
| 1.1 |
|
|
| 61,896 |
|
|
| 1.5 |
|
OTHER INCOME |
|
| 18,586 |
|
|
| .5 |
|
|
| - |
|
|
| - |
|
EQUITY IN AFFILIATE LOSS |
|
| (70,405 | ) |
|
| (1.9 | ) |
|
| (81,000 | ) |
|
| (2.0 | ) |
INCOME TAX BENEFIT |
|
| - |
|
|
| - |
|
|
| 12,500 |
|
|
| .3 |
|
NET INCOME (LOSS) |
| $ | 55,031 |
|
|
| 1.5 | % |
| $ | (69,952 | ) |
|
| (1.7 | )% |
Overview of Results
For the thirteen weeks ending June 29, 2025, net sales were $3.78 million, a decrease of $330,949 or 8.1% compared to $4.11 million for the same period in 2024. The decline reflects the closing of the Village Bier Garten and the Ham Lake Burger Time location in the first quarter of 2025. Total costs and expenses decreased to $3.85 million from $4.30 million in the prior year. The operating result improved from a loss of $188,543 in the previous year to a loss of $75,121. After nonoperating items, including investment gains, interest, and equity losses, the Company recorded net income of $55,031, a significant improvement compared to a net loss of $69,952 in the same period of 2024.
Net Revenues
Net sales for the thirteen weeks ended June 29, 2025, were $3,779,690, reflecting a decline from $4,110,639 in the same period of 2024. The decrease was primarily due to the closure of two locations, which recorded approximately $400,000 in revenue in 2024. The recently acquired Schnitzel Haus, purchased in the second quarter of 2024, contributed approximately $330,000 in sales during the 2025 quarter.
Sales at Burger Time restaurants ranged from a low of approximately $133,000 to a high of $344,000 per location, with an average unit sales volume of approximately $240,000. Seasonal factors also influenced results: Cape Cod-based PIE remains a significant contributor in the second and third quarters. In the second quarter, PIE sales totaled $1,042,000, a 4% increase year-over-year.
| 20 |
| Table of Contents |
Costs and Expenses-
Food and Paper Costs
Food and paper costs decreased to 33.1% of sales (or $1,249,220) compared to 38.1% ($1,565,070) for the prior year. This improvement reflects the benefits of selective menu price increases, menu adjustments at BTND (including the introduction of hand-cut fries), and cost-cutting measures at all locations, which helped offset inflationary pressures.
Labor Costs
Labor and benefits costs were 36.4% of sales ($1,374,603) in 2025, down from 37.7% ($1,551,762) in 2024. The improvement was driven by enhanced labor cost controls and the closure of Village Bier Garten, which historically had higher labor costs.
Occupancy Costs
Occupancy costs declined to 8.0% of sales ($302,021) from 8.4% ($344,356) in 2024. The reduction was due to the closure of certain underperforming units and leveraging sales volume against fixed occupancy expenses.
Other Operating Expenses
Other operating expenses increased to 6.7% of sales ($253,185), compared to 5.2% ($211,838) in the prior year, reflecting higher maintenance, utilities, and fees associated with increased use of third-party delivery.
Depreciation and Amortization
Depreciation and amortization expense decreased to 3.8% of sales ($144,725), compared to 4.2% ($171,351) in 2024, due to more assets reaching full depreciation.
General and Administrative Costs
General and administrative costs increased to $531,057 from $454,805, increasing as a percentage of sales to 14.1% from 11.1% in the prior year. The increase is, in part, attributable to consulting costs directed toward company-wide cost control initiatives.
charged to general and administrative expenses,
Operating Income (Loss)
The loss from operations improved to a loss of $75,121, compared to a $188,543 loss in the same period of 2024. This improvement reflects cost savings initiatives and better margins despite lower sales.
Other Income and Expenses
| - | Unrealized gain on marketable securities was $82,128 compared to a gain of $118,184 in 2024. |
| - | Realized investment gains were $79,026 versus $29,562 in 2024. |
| - | Interest expense was $19,550, slightly lower than $22,551 in 2024. |
| - | Interest and dividend income was $40,367 compared to $61,896 in 2024. |
| - | Equity in the Bagger Dave’s affiliate loss was $70,405 versus $81,000 in the prior year. |
| - | No income tax benefit was recorded for the quarter, compared to $12,500 in the same period last year. |
Net Income (Loss)
Net income for the thirteen weeks ending June 29, 2025, was $55,031 (1.5% of sales) compared to a net loss of $69,952 (1.7% of sales) in 2024. The improved results were the result of expense reductions, disciplined cost management, and improvements in operating performance, as well as investment gains and dividends.
| 21 |
| Table of Contents |
Results of Operations – Twenty-Six Weeks Ended June 29, 2025 Compared to Twenty-Six Weeks Ended June 30, 2024
Overview of Results
For the twenty-six weeks ending June 29, 2025, net sales were $7.01 million, a decrease of $290,093 or 4.0% compared to $7.30 million for the same period in 2024. Total costs and expenses decreased to $7.33 million from $8.12 million in the prior year. The loss from operations improved significantly to $367,317, compared to a loss of $819,372 in 2024. The following table sets forth our Condensed Statements of Operations and percentages of total sales for the twenty-six week fiscal periods. The percentages below may not reconcile because of rounding.
|
| 26 Weeks ended. June 29, 2025 |
|
| 26 Weeks ended, June 30, 2024 |
| ||||||||||
|
| Amount |
|
| % |
|
| Amount |
|
| % |
| ||||
SALES |
| $ | 7,010,763 |
|
|
| 100.0 | % |
| $ | 7,300,786 |
|
|
| 100.0 | % |
COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and paper costs |
|
| 2,449,549 |
|
|
| 34.9 |
|
|
| 2,844,028 |
|
|
| 39.0 |
|
Labor costs |
|
| 2,592,500 |
|
|
| 37.0 |
|
|
| 2,938,448 |
|
|
| 40.2 |
|
Occupancy costs |
|
| 611,715 |
|
|
| 8.7 |
|
|
| 680,631 |
|
|
| 9.3 |
|
Other operating expenses |
|
| 441,105 |
|
|
| 6.3 |
|
|
| 415,738 |
|
|
| 5.7 |
|
Depreciation and amortization |
|
| 301,120 |
|
|
| 4.3 |
|
|
| 331,893 |
|
|
| 4.5 |
|
General and administrative |
|
| 982,091 |
|
|
| 14.0 |
|
|
| 909,420 |
|
|
| 12.5 |
|
Total costs and expenses |
|
| 7,378,080 |
|
|
| 105.2 |
|
|
| 8,120,158 |
|
|
| 111.2 |
|
Loss from operations |
|
| (367,317 | ) |
|
| (5.2 | ) |
|
| (819,372 | ) |
|
| (11.2 | ) |
UNREALIZED GAIN ON MARKETABLE SECURITIES |
|
| 38,104 |
|
|
| .5 |
|
|
| 232,947 |
|
|
| 3.2 |
|
REALIZED INVESTMENT GAIN |
|
| 174,064 |
|
|
| 2.5 |
|
|
| 29,562 |
|
|
| .4 |
|
INTEREST EXPENSE |
|
| (41,104 | ) |
|
| .6 |
|
|
| (50,039 | ) |
|
| (0.7 | ) |
INTEREST AND DIVIDEND INCOME |
|
| 80,967 |
|
|
| 1.2 |
|
|
| 136,750 |
|
|
| 1.9 |
|
OTHER INCOME |
|
| 45,173 |
|
|
| .1 |
|
|
| - |
|
|
| - |
|
EQUITY IN AFFILIATE LOSS |
|
| (204,705 | ) |
|
| 1.9 |
|
|
| (175,500 | ) |
|
| (2.4 | ) |
INCOME TAX BENEFIT |
|
| - |
|
|
| - |
|
|
| 130,000 |
|
|
| 1.8 |
|
NET LOSS |
| $ | (274,818 | ) |
|
| (3.9 | )% |
| $ | (515,652 | ) |
|
| (7.1 | )% |
Net Revenues
Net sales for the twenty-six weeks ended June 29, 2025, were $7,010,763, reflecting a decline from $7,300,786 in the same period of 2024. The decrease was principally the result of a decline in sales of approximately $900,000, resulting from the closure of two locations, offset by the inclusion of Schnitzel Haus for the entire 26-week period in 2025. Burger Time unit sales for the 26 weeks ranged in gross sales from approximately a low of $250,000 to a high of $628,000. The average sales for each Burger Time location open during the 26-week period in both years was approximately $448,000, a decline from $465,000 in 2024.
Costs and Expenses-
Food and Paper Costs
Food and paper costs decreased to 34.9% of sales (or $2,449,549) compared to 39.0% ($2,844,028) for the prior year. This decrease reflects the benefits of menu pricing strategies, improved purchasing, and cost control efforts.
| 22 |
| Table of Contents |
Labor Costs
Labor and benefits costs were 37.0% of sales ($2,592,500) in 2025, down from 40.2% ($2,938,448) in 2024. The improvement was due to better labor cost management, operational efficiencies, and the closure of higher-cost locations.
Occupancy Costs
Occupancy costs declined to 8.7% of sales ($611,715) from 9.3% ($680,631) in 2024. This reduction reflects the benefit associated with closing the Village Bier Garten, which had a high occupancy cost.
Other Operating Expenses
Other operating expenses decreased to 6.3% of sales ($441,105), compared to 5.7% ($415,738) in the prior year. The increase resulted from fees associated with greater utilization of third-party delivery services and higher utility costs at most restaurants.
Depreciation and Amortization
Depreciation and amortization expense decreased to 4.3% of sales ($301,120) from 4.5% ($331,893) in 2024. The decrease primarily reflects more assets reaching full depreciation.
General and Administrative Costs
General and administrative costs were steady at 14.0% of sales, an increase to $982,091 from $909,420 in 2024. The increase reflects the additional consulting costs charged to corporate expenses.
Operating Income (Loss)
The loss from operations improved to $367,317, compared to a loss of $819,372 in 2024. This improvement reflects cost-cutting measures and operational efficiencies despite lower sales.
Other Income and Expenses
| - | Unrealized gains on marketable securities were $82,128 compared to a gain of $232,947 in 2024. |
| - | Realized investment gains were $174,064 versus $29,562 in 2024. |
| - | Interest expense was $41,104, slightly lower than $50,039 in 2024. |
| - | Interest, dividend, and other income was $126,140 compared to $136,750 in 2024. |
| - | Equity in affiliate loss was $204,705 versus $175,500 in the prior year. |
| - | No income tax benefit was recorded for the period, compared to $130,000 in the same period last year. |
Net (Loss)
Net loss for the twenty-six weeks ended June 29, 2025, was $274,818 (3.9% of sales) compared to a net loss of $515,652 (7.1% of sales) in 2024. Significant expense reductions, disciplined cost management, and operational efficiencies drove the decrease in net loss.
Restaurant-Level EBITDA
To supplement the consolidated financial statements, which are prepared and presented in accordance with GAAP, we use restaurant-level EBITDA (earnings before interest, taxes, depreciation, and amortization), which is not a measure defined by GAAP. This non-GAAP operating measure is useful to both management and investors because it represents one means of gauging the overall profitability of our recurring and controllable core restaurant operations. However, this measure is not indicative of our overall results, nor does the restaurant-level profit accrue directly to the benefit of stockholders, primarily due to the exclusion of corporate-level expenses. Depreciation and amortization are excluded because they are not ongoing. Restaurant-level EBITDA for the thirteen weeks ending June 29, 2025, was $600,661 (15.0% of revenues), compared to $437,613 (10.6% of revenues) in 2024. This non-GAAP metric reflects a significant improvement in controllable restaurant-level profitability, driven by better labor and cost controls, selective menu price increases, and efficiency improvements across operating units.
| 23 |
| Table of Contents |
|
| 26 Weeks Ended, |
|
| 13 Weeks Ended, |
| ||||||||||
|
| June 29, 2025 |
|
| June 30, 2024 |
|
| June 29, 2025 |
|
| June 30, 2024 |
| ||||
Revenues |
| $ | 7,010,763 |
|
| $ | 7,300,786 |
|
| $ | 3,779,690 |
|
| $ | 4,110,639 |
|
Reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| (367,317 | ) |
|
| (819,372 | ) |
|
| (75,121 | ) |
|
| (188,543 | ) |
Depreciation and amortization |
|
| 301,120 |
|
|
| 331,893 |
|
|
| 144,725 |
|
|
| 171,351 |
|
General and administrative, corporate-level expenses |
|
| 982,091 |
|
|
| 909,420 |
|
|
| 531,057 |
|
|
| 454,805 |
|
Restaurant-level EBITDA |
| $ | 915,894 |
|
| $ | 421,941 |
|
| $ | 600,661 |
|
| $ | 437,613 |
|
Restaurant-level EBITDA margin |
|
| 13.1 | % |
|
| 5.8 | % |
|
| 15.9 | % |
|
| 10.6 | % |
Restaurant-level EBITDA for both the 13-week and the 26-week periods ended June 29, 2025, showed significant improvement over the prior year. This non-GAAP metric reflects stronger operational performance and improved cost controls, demonstrating continued progress in the Company’s core restaurant operations. Restaurant-level EBITDA for the 26 weeks ended June 29, 2025, was $915,894.
Summary
During the first half of fiscal 2025, the Company has made significant strides in reducing operating losses through effective cost management and operational efficiencies. Although sales declined due to the closure of underperforming locations, profitability metrics have improved markedly. Continued cost discipline and sales initiatives will remain a focus for the remainder of the year. Our focus on operational efficiencies, disciplined expense management, and strategic closures of underperforming locations has resulted in significantly improved Store EBITDA margins. Continued cost management and leveraging seasonal strengths will be a central focus of management in future quarters.
Liquidity and Capital Resources
On June 29, 2025, we had $3.5 million in cash, cash equivalents and marketable securities and net working capital of $4.4 million, an increase of $627,000 from December 29, 2024. Reflecting, in part, the $424,000 increase in assets held for sale, classified as a current asset.
Liquidity is needed to support working capital, capital expenditures, general corporate activities, and potential investments or acquisitions. Our operations do not require significant working capital, and, like many restaurant companies, we generally operate with negative working capital requirements. For the 26 weeks ended June 29, 2025, restaurant EBITDA improved significantly from the 2024 amount as a result of closing underperforming locations. Loans to NGI Corporation and the purchase of inventory, as described in Note 9 to the financial statements accompanying this report, have reduced cash and investments on hand.
Unforeseen public health matters may impact the United States at any time, and increased tariffs may impact the economy in the future. It is difficult to predict the United States economy in general, the impact on the quick service drive-through segment of the food service industry, and our operating results and financial condition.
| 24 |
| Table of Contents |
Summary of Cash Flows
Cash Flows Provided by Operating Activities
Operating cash flow for the 26 weeks ending June 29, 2025, was $77,623. The source of cash is the result of improved operating income and seasonal patterns in our business, which significantly affect the Company’s cash flow.
Cash Flows Used in Investing Activities
We have continued to make improvements in our existing businesses and to seek acquisitions. During the 13 weeks ending June 29, 2025, we advanced $572,357 to NGI Corporation and directly purchased $292,372 of inventory related to the NGI Corporation’s Disney water bottle program.
Cash Flows Used in Financing Activities
A significant portion of our cash flow used in financing activities is allocated to service our debt.
Contractual Obligations
As of June 29, 2025, we had $3.6 million in contractual obligations, including $2.2 million relating to amounts due under mortgages on the real property where our stores are situated, including $1.4 million in operating lease obligations related to our recent acquisitions. Our monthly required payments on lease and mortgage obligations are approximately $36,000.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and Item 10(f)(1) of Regulation S-K, we have elected to comply with certain scaled disclosure reporting obligations. We are not required to provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
(1) Evaluation of Disclosure Controls and Procedures
We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in the reports we filed under the Exchange Act is recorded, processed, summarized, and reported within the periods specified by the SEC’s rules and forms. Disclosure controls are also designed to ensure that this information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
As of June 29, 2025, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) promulgated under the Exchange Act. Based upon that evaluation and the material weakness in our internal control over financial reporting as disclosed in the Company’s Form 10-K for the fiscal year ended December 29, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 29, 2025, our disclosure controls and procedures were not effective at a reasonable assurance level in ensuring that material information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules, regulations, and forms of the SEC, including ensuring that such material information is accumulated by and communicated to our management, including our Chief Executive Officer, Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
(2) Changes in Internal Control over Financial Reporting
During the second quarter, the Company engaged a third-party accounting services organization to manage the accounts payable and payroll activities and to prepare preliminary financial statements for review, providing for an enhanced segregation of duties. In addition to the matters discussed previously, the Company is considering utilizing outside consultants as an extension of management, potentially to assist in the accounting for significant acquisitions. So far in fiscal 2025, the Company has not completed any acquisitions. Except for the items described above, there were no other changes in the Company’s internal control over financial reporting during our most recently completed fiscal quarter, which ended June 29, 2025, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
| 25 |
| Table of Contents |
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to be threatened or contemplated against it.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
Since the date on which the Company filed its Annual Report on Form 10-K and through the date of this quarterly report, we have not sold any securities.
Use of Proceeds
Since its initial public offering in November 2021, the Company has used the proceeds received from the sale of securities for general working capital purposes and to acquire (i) the restaurant assets of Keegan’s Seafood Grille ($1,150,000), (ii) Pie in the Sky Bakery and Coffee Shop ($1,160,000), (iii) a 40.7% of the outstanding shares of common stock of Bagger Dave’s ($1,390,000), (iv) the Village Bier Garten, (recently closed) and (v) Schnitzel Haus ($943,000), all as more fully described under Management’s Discussion and Analysis of Financial Condition and Results of Operations.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None
| 26 |
| Table of Contents |
ITEM 6. EXHIBITS.
Exhibit |
| Description |
|
|
|
|
|
| Location Reference |
| Agreement dated as of April 2, 2025, by and between BT Brands, Inc. and NGI Corporation. |
| Filed herewith | |
| Filed herewith | |||
| Filed herewith | |||
| Filed herewith | |||
| Filed herewith | |||
101. INS. |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
| Furnished herewith |
101. SCH. |
| Inline XBRL Taxonomy Extension Schema Document. |
| Furnished herewith |
101. CAL. |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| Furnished herewith |
101. DEF. |
| Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| Furnished herewith |
101. LAB. |
| Inline XBRL Taxonomy Extension Labels Linkbase Document. |
| Furnished herewith |
101. PRE. |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| Furnished herewith |
104 |
| Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
| Furnished herewith |
| 27 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| BT BRANDS, INC. |
| |
|
|
|
|
Date: August 19, 2025 | By: | /s/ Kenneth Brimmer |
|
| Name: | Kenneth Brimmer |
|
| Title: | Chief Operating Officer and Principal Financial Officer |
|
28 |